A highly interesting and data-rich seminar was held on Wednesday afternoon in Cannes on the theme “Effectiveness: The New Frontier”. Grace Kite (economics PhD and founder of Magic Numbers and Magic Works), Bridget Angear (co-founder of craig+bridget) and Zaid Al-Qassab (Group CEO of M&C Saatchi) spoke about how to create impact.
Grace Kite, who is always well worth listening to, opened by talking about “advertising’s superpower”.
In short, it is advertising that can make people willing to pay more for a product.
“If you can raise the price slightly without losing customers, you make money,” she observed.
To achieve this, she had three concrete pieces of advice on how to communicate.
1. Communicate quality
Grace Kite chose the British tonic manufacturer Fever Tree as her example here. They focus on quality in all their marketing — from raw materials to packaging and drink coasters. They have even trained bartenders to always place the tonic bottle with its label facing the customer after pouring.
This thoroughly executed strategy has meant, among other things, that consumers are willing to pay twice as much for Fever Tree in British grocery retail compared to its nearest competitor — Schweppes.
Sainsbury’s own-label tonic was priced at 7 pence per 100 ml, while Schweppes cost 16 pence per 100 ml. Consumers, however, are willing to pay 34 pence for 100 ml of Fever Tree.
2. Communicate difference
Kantar describes in its BrandZ reports the importance of meaningful difference. Being meaningfully different makes a brand so much more salient in people’s minds. Grace Kite reminded the audience that once you have defined the difference you want to communicate, you should stick with it — year after year. It takes a while before the price effect kicks in properly. But then it keeps growing.
3. Invest more when prices rise
When prices go up, a natural consumer reaction is to look for alternative brands. But if you invest extra in advertising at that point — rather than in price promotions — profitability will hold.
Grace Kite showed how profitability was affected after British soft drink brands ran TV advertising. Combining advertising with price promotions caused profitability to fall. But if you instead raised the price slightly at the same time, profitability increased.
Don’t forget to make people laugh
At last year’s Cannes Lions, BBDO’s chairman and CEO Andrew Robertson lamented that advertising had become increasingly unfunny. He urged the Cannes organisers to introduce a humour category in the awards — which has now happened this year.
He is not alone in pointing to the importance of humour in creating effective advertising. Orlando Wood at System1, among others, has clearly demonstrated the value of a smile.
Bridget Angear presented evidence of this at Wednesday’s seminar. The starting point was the 1,500 advertising campaigns gathered in the IPA’s (the British equivalent of Komm) Effectiveness Awards database, going back to 1980.
She noted that since 2016, humour has become increasingly rare in advertising — despite clear evidence that humorous advertising drives sales, market share and profitability, among other things.
The effect is particularly powerful when combined with a somewhat larger budget. She pointed to how “humour-free” campaigns with an average budget of £37 million achieved a net profit of £59 million. Not bad at all.
But campaigns that combined humour with a larger budget — averaging £54 million — performed almost twice as well, reaching a net profit of £102 million.
“Humour is used least of all in B2B. It seems as though marketers assume that B2B customers become deadly serious and dull the moment they arrive at work,” she observed, urging the audience to create more communication that brings a smile to people’s faces.
Sustainability in focus creates value on multiple levels
Zaid Al-Qassab focused his part of the seminar on the industry’s role in building a more sustainable society.
“Marketing and sustainability are not opposites. We have the power and the opportunity to make a difference here,” he argued, reminding the audience that there is often a more sustainable solution than the first one that comes to mind.
But it also means you need to measure these effects of your work — most importantly, you need to know internally what impact your communication is having in terms of sustainability. Being open about the efforts you are making is no disadvantage either. Genuinely trying to improve your impact earns respect.
He highlighted three interesting examples of sustainability initiatives that have made waves.
1. Influence the system
Saatchi in Australia and the Minderoo Foundation aimed to influence leaders at a major climate summit through their Plastic Forecast campaign.
2. Influence demand
Love Island on ITV is a popular reality show in the UK, where eBay was the main sponsor. Rather than driving sales and consumption — which is the typical approach in that type of TV programme — the focus was on second-hand shopping and recycling.
3. Influence the ability to change
Budweiser recognised that many small bars were not using renewable energy simply because it was too expensive for them. Budweiser chose to purchase large quantities of renewable energy and sell it on to small bars at the price they had previously paid for less clean energy.
“It’s about thinking things through. What can you do to both make money and create something that can be genuinely useful in a broader perspective — for people and for the planet,” he concluded.
